bhc－BBQ Legal Battle Intensifies
bhc Accuses Chairman Yoon Hong-geun of Breach of Trust
Fierce Conflict Since 2013 Separation
[Asia Economy Reporter Seungjin Lee] The legal battle between chicken franchise companies bhc and BBQ is escalating into a mudslinging fight. After bhc filed a complaint accusing BBQ Chairman Yoon Hong-geun of breach of trust, BBQ issued a warning that it will respond by mobilizing all civil and criminal measures.
On the 20th, bhc announced that it recently filed a complaint with the Seongnam Sujeong Police Station against Chairman Yoon and three others for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust) and requested a thorough investigation.
In the complaint, bhc claimed that the Yoon family, who owns 100% of a private company, improperly lent several billion won to the company, causing damage to bhc. They added that they requested the investigation to sound an alarm against improper management practices due to the failure of managerial duty of care.
GNS Highnet is a multi-level marketing company established in 2013 through personal investment by Chairman Yoon. This company is 100% owned by Chairman Yoon and his son and is neither an affiliate nor a subsidiary of Genesis or BBQ. At that time, prior to establishing GNS Highnet, Chairman Yoon sold the affiliate bhc for 120 billion won due to worsening management conditions.
Since its establishment, GNS Highnet has continuously suffered losses. Genesis, wholly owned by Chairman Yoon and his two children, lent a total of 7.165 billion won to GNS Highnet. BBQ also lent 1.19661 billion won in November 2016, which bhc regards as constituting breach of trust in the course of business.
A bhc official stated, "BBQ withdrew from the business without securing even the minimum measures to guarantee the recovery of the loan from GNS Highnet, Chairman Yoon’s personal company, and has not made efforts to recover the outstanding amount for over four years." He added, "There is an intentional breach of trust to promote personal business with affiliate company funds, and a thorough investigation is necessary to sound an alarm against improper ownership and management practices."
In response, BBQ denied the allegations, calling them distorted accusations by a competitor aiming to damage the brand image. A BBQ representative said, "Our company will sincerely cooperate with the investigation authorities to clearly prove our innocence," and added, "We will firmly respond by mobilizing all civil and criminal measures against the competitor’s malicious slander."
Meanwhile, bhc and BBQ, which once shared the same roots, continue to engage in various civil and criminal lawsuits over conflicts such as trade secret leaks. In July 2015, bhc Chairman Park Hyun-jong was indicted last November for allegedly accessing BBQ’s internal computer network twice by stealing IDs and passwords of former and current BBQ employees. At the first trial held last month, bhc denied all charges, and both sides engaged in fierce legal battles.
Prior to this, bhc won a lawsuit against BBQ for product supply payments, receiving a judgment for payment of about 29 billion won. Additionally, bhc won an appeal in the ‘Icheon City Land Damage Compensation’ case filed by BBQ, and the two sides have been embroiled in a mudslinging fight for several years.
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